State cites Montgomery IDA

Friday

Mar 21, 2014 at 2:00 AM

MONTGOMERY — A state report criticizes the Town of Montgomery Industrial Development Agency for not knowing the financial implications of tax breaks it gave to United Natural Foods Inc. for its warehouse project on Neelytown Road.

James Walsh

MONTGOMERY — A state report criticizes the Town of Montgomery Industrial Development Agency for not knowing the financial implications of tax breaks it gave to United Natural Foods Inc. for its warehouse project on Neelytown Road.

In a report released this week, the state Authorities Budget Office revealed the results of an investigation prompted by a complaint from a coalition of the region's labor leaders.

One facet of the complaint was that the IDA accepted an incomplete application from United Natural Foods Inc. in 2013. The application did not indicate how much money the company expected to save under an agreement to phase in property taxes over 15 years. It also did not say whether sales — and use-tax exemptions were sought and what they were worth.

"IDA officials admit that no formal records exist indicating that a cost-benefit analysis of the project was done," the ABO Office states in its report. "... It is questionable how the IDA board could adequately evaluate the project without knowing the type and value of the financial assistance being requested."

The company is building a 500,000-square-foot warehouse on Neelytown Road that's estimated to cost $58 million.

Montgomery supervisor and IDA board member Michael Hayes said he was uncertain whether IDA documents revealed the value of the approved tax breaks, but that the IDA would look into it.

Representatives of the unions that filed the complaint had protested against United Natural Foods at its annual meeting in December. Labor officials were upset over the hiring of out-of-state construction workers.

The ABO also found that board member Richard Lomazzo had not completed state-mandated training.

Hayes completed the training online and said the IDA needed to determine if Lomazzo did the same.

"And if so, how it's registered" with the state, Hayes said.

Lomazzo was also criticized by the ABO for what it called the potential appearance of a conflict of interest. At issue is a sewage pumping station that United Natural Foods considered constructing. The ABO stated that the pump station could benefit adjoining properties, including Lomazzo's employer, Cardinal Health.

"While the plans for these improvements were abandoned due to cost estimates," the ABO report stated, "at the time of the discussions it could be perceived that Mr. Lomazzo's employer would benefit from the improvements."

Lomazzo did not return a reporter's call.

Hayes says the ABO got it wrong. The pump station, he said, was discussed with another company that considered moving to the site.

"That was not the IDA's idea, it was not Mr. Lomazzo's idea," Hayes said.